Commercial FinTech Bank OakNorth valued at $ 5 billion
UK commercial FinTech OakNorth was valued at $ 5 billion following the sale by Indiabulls Housing Finance of part of its 40% stake in the startup bank, The Block Crypto reported, citing anonymous sources. Goldman Sachs acted as advisor on the transaction.
Indiabulls, a mortgage lender headquartered in Gurugram, Haryana, India, is the country’s second largest housing finance company. He sold 251 crores (about $ 34 million) of his stake in the merchant bank, which he acquired in 2015, according to a regulatory filing.
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In late 2020, Indiabulls sold approximately 7.7% of its stake in OakNorth in two deals, valued at approximately $ 145 million. At that time, the bank was valued at around $ 2 billion, down from its previous valuation of $ 2.8 billion, following its $ 440 million round of funding led by SoftBank Vision Fund and Clermont in February 2019.
Founded in 2013 by Rishi Khosla and Joel Perlman, OakNorth is a FinTech bank focused on providing loans to small and medium enterprises (SMEs) in the UK. The founders started the neobank after seeking working capital to support the growing needs of their financial research outsourcing company, according to the OakNorth website.
Although their business was making a profit and had a strong cash flow and good customer loyalty, commercial banks could not accommodate them. Later, they obtained the necessary funds from the institutional division of a client’s bank.
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The duo developed this business and it was acquired a few years later by Moody’s Corporation in 2014. The experience prompted Khosla and Perlman to launch OakNorth in 2015 and develop the ON Credit Intelligence suite.
The challenger bank said it was looking to strengthen the “missing link” – growth companies that play an important role in economic growth and jobs, but struggle to obtain quick and flexible debt financing.
“We are redefining the way banks lend to the missing link, giving today’s entrepreneurs the access to the capital they need to grow, create jobs, build communities and fuel our economy. … We are transforming business loans so entrepreneurs can thrive, ”according to the company’s website.